Connect 2-Semester Access Card for Fundamental Accounting Principles
Connect 2-Semester Access Card for Fundamental Accounting Principles
22nd Edition
ISBN: 9780077632755
Author: John Wild
Publisher: McGraw-Hill Education
Question
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Chapter 7, Problem 1APSA
To determine

Journals:

Journals are the books where all the original entries of business transactions are recorded on basis of its occurrence order and date.

Sales Journal:

The journal where all the credit sales of merchandise are recorded is called a Sales Journal.

Purchases Journal:

It is the journal where all the purchase on accounts or credit purchase of merchandise, supplies, equipment etc. are recorded.

Cash Receipts Journal:

Cash receipts journal records all type cash receipts of a business organization like cash sales, collections from debtors, loans and borrowings etc.

Cash Disbursements Journal:

The journal where all the cash payments are recorded is called a cash payment journal like cash purchases of equipment, supplies, inventories and payment to creditors.

General Journal:

The transactions which are not recorded in the special journals namely, sales journal, purchase journal, cash receipt journal, and cash disbursement journal are recorded in the general journal.

Accounts Receivable Subsidiary Ledger:

A subsidiary ledger of accounts receivable shows the amount of money paid and owed by debtors for the transactions made on credit individually.

Schedule of Accounts Receivable:

A schedule of accounts receivable represents the overall amount of money owed by the debtors for credit transactions during a specified period.

To determine:

1. Open the general ledger accounts and subsidiary ledger of accounts receivables and accounts payable.

2. Preparation of special journals; sales journal, purchases journal, cash receipts journal, cash disbursements journal and General Journal.

3. Preparation of trial balance and schedules of both accounts receivable and accounts payable to prove the accuracy of subsidiary ledgers.

Expert Solution & Answer
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Explanation of Solution

Explanation:

1. General Ledger Accounts

Cash
Date Debit Credit Balance
6 $82,000    
12 $16,464    
13   $42,728  
13 $9,996    
15   $18,300  
15 $34,680    
20 $5,488    
23   $29,596  
31   $18,300  
31 $30,180    
       
Mar. 31     $69,884
Accounts Receivable
Date Debit Credit Balance
Mar. 2 $16,800    
3 $10,200    
10 $5,600    
12   $16,800  
13   $10,200  
20   $5,600  
27 $14,910    
28 $4,315    
       
Mar. 31     $19,225
Inventory
Date Debit Credit Balance
Mar. 1     $10,000
1 $43,600    
2   $8,400  
3   $5,800  
10   $2,900  
13   $872  
14 $32,625    
15   $20,210  
17   $2,425  
    $604  
27   $7,220  
28   $3,280  
31   $16,820  
       
Mar. 31     $17,694
Office Supplies
Date Debit Credit Balance
Mar. 3 $1,230   $1,230
       
Mar. 31     $1,230
Store Supplies
Date Debit Credit Balance
16 $1,770   $1,770
       
Mar. 31     $1,770
Office Equipment
Date Debit Credit Balance
9 $21,850    
19   $630  
       
Mar. 31     $21,220
Accounts Payable
Date Debit Credit Balance
Mar. 1   $43,600  
3   $1,230  
9   $21,850  
13 $43,600    
14   $32,625  
16   $1,770  
17 $2,425    
19 $630    
23 $30,200    
       
Mar. 31     $24,220
Long-term Notes Payable
Date Debit Credit Balance
6   $82,000  
       
Mar. 31     $82,000
Z. Church, Capital
Date Debit Credit Balance
Mar. 1     $10,000
       
Mar. 31     $10,000
Sales
Date Debit Credit Balance
Mar. 2   $16,800  
3   $10,200  
10   $5,600  
15   $34,680  
27   $14,910  
28   $4,315  
31   $30,180  
       
Mar. 31     $116,685
Sales Discount
Date Debit Credit Balance
12 $336    
13 $204    
20 $112    
       
Mar. 31     $652
Cost of Goods Sold
Date Debit Credit Balance
Mar. 2 $8,400    
3 $5,800    
10 $2,900    
15 $20,210    
27 $7,220    
28 $3,280    
31 $16,820    
       
Mar. 31     $64,630
Sales Salaries Expense
Date Debit Credit Balance
Mar.15 $18,300    
31 $18,300    
       
Mar. 31     $36,600

Accounts Receivable Subsidiary ledger

Min Cho
Date Debit Credit Balance
Mar. 2 $16,800   $16,800
12   $16,800 0
Mar. 31     0
Linda Witt
Date Debit Credit Balance
Mar. 3 $10,200   $10,200
13   $10,200 0
28 $4,315   $4,315
Mar. 31     $4,315
Jovita Albany
Date Debit Credit Balance
Mar. 10 $5,600   $5,600
20   $5,600 0
27 $14,910   $14,910
Mar. 31     $14,910

Accounts Payable Subsidiary Ledger

Van Industries
Date Debit Credit Balance
Mar. 1   $43,600 $43,600
13 $43,600   0
Mar. 31     0
Gabel Company
Date Debit Credit Balance
Mar. 3   $1,230 $1,230
16   $1,770 $3,000
Mar. 31     $3,000
Spell Company
Date Debit Credit Balance
Mar. 9   $21,850 $3,000
20 $630   $21,220
Mar. 31     $21,220
CD Company
Date Debit Credit Balance
Mar. 14   $32,625 $32,625
19 $2,425   $30,200
23 $30,200   0
Mar. 31     0

2. Special Journals and General Journal

Sales Journal
Date Account debited Invoice
Number
Accounts Receivable Dr.
Sales CR.
Cost of Goods Sold Dr.
Inventory Cr
Mar. 2 Min Cho 854 $16,800 $8,400
3 Linda Witt 855 $10,200 $5,800
10 Jovita Albany 856 $5,600 $2,900
27 Jovita Albany 857 $14,910 $7,220
28 Linda Witt 858 $4,315 $3,280
         
Mar. 31 Totals   $51,825 $27,600

Foot and crossfoot of sales journal

Debit Columns Credit Columns
Accounts Receivable Dr. $51,825 Sales CR. $51,825
Cost of Goods Sold Dr. $27,600 Inventory Cr $27,600
Total $79,425   $79,425
Purchases Journal
Date Account Date of Invoice Terms Accounts Payable Cr. Inventory Dr. Office Supplies Dr. Other Accounts Dr.
1 Van Industries 3/1 2/15, n/30 $43,600 $43,600    
3 Gabel Company 3/3 n/10 EOM $1,230   $1,230  
9 Spell Supply 3/9 n/10 EOM $21,850     $21,850
14 CD Company 3/13 2/10, n/30 $32,625 $32,625    
16 Gabel Company 3/16 n/10 EOM $1,770     $1,770
               
Mar. 31 Totals     $101,075 $76,225 $1,230 $23,620

Foot and crossfoot of purchase journal

Debit Columns Credit Columns
Inventory Dr. $76,225 Accounts Payable Cr. $101,075
Office Supplies Dr. $1,230    
Other Accounts Dr. $23,620    
Total $101,075   $101,075
Cash Receipts Journal
Date Account Credited Cash Dr. Sales Discount Dr. Accounts Receivables Cr. Sales Cr Other Account Cr. Cost of Goods Sold Dr.
Inventory Cr.
6 Lon-term Note Payable $82,000       $82,000  
12 Min Cho $16,464 $336 $16,800      
13 Linda Witt $9,996 $204 $10,200      
15 Sales $34,680     $34,680   $20,210
20 Jovita Albany $5,488 $112 $5,600      
31 Sales $30,180     $30,180   $16,820
               
Mar. 31 Totals $178,808 $652 $32,600 $64,860 $82,000 $37,030

Foot and crossfoot of cash receipts journal

Debit Columns Credit Columns
Cash Dr. $178,808 Accounts Receivables Cr. $32,600
Sales Discount Dr. $652 Sales Cr. $64,860
Cost of Goods Sold Dr. $37,030 Other Account Cr. $82,000
    Inventory Cr. $37,030
Total $216,490   $216,490
Cash Disbursements Journal
Date Check Number Payee Account Debited Cash Cr. Inventory Cr Other Account Dr. Accounts Payable Dr.
13 416 Van Industries Van Industries $42,728 $872   $43,600
15 417 Payroll Sales Salaries expense $18,300   $18,300  
23 418 CD Company CD Company $29,596 $604   $30,200
31 419 Payroll Sales Salaries expense $18,300   $18,300  
               
Mar. 31   Totals   $108,924 $1,476 $36,600 $73,800

Foot and crossfoot of cash disbursements journal

Debit Columns Credit Columns
Other Account Dr. $36,600 Cash Cr $108,924
Accounts Payable Dr. $73,800 Inventory Cr $1,476
Total $110,400   $110,400
General Journal
Date Accounts name Debit Credit
Mar. 17 Accounts Payable – CD Company $2,425  
  Merchandise inventory   $2,425
       
19 Accounts Payable – Spell Supply $630  
  Office Equipment   $630

Foot and crossfoot of general journal

Debit Columns Credit Columns
Accounts Payable Dr. $3,055 Merchandise inventory Cr. $2,425
    Office Equipment Cr $630
Total $3,055   $3,055

3. Trial balance and schedules of accounts receivable and accounts payable

CHURCH COMPANY
Trial balance
March 31.
Accounts Debit Credit
Cash $69,884  
Accounts Receivable $19,225  
Inventory $17,694  
Office supplies $1,230  
Store supplies $1,770  
Office equipment $21,220  
Accounts Payable   $24,220
Long-term notes payable   $82,000
Capital   $10,000
Sales   $116,685
Sales Discount $652  
Cost of Goods Sold $64,630  
Sales salaries expense $36,600  
Total $232,905 $232,905

Schedule of accounts receivable

CHURCH COMPANY
Schedule of Accounts Receivable
March 31.
Jovita Albany $14,910
Linda Witt $4,315
Total Accounts Receivable $19,225

Schedule of accounts payable

CHURCH COMPANY
Schedule of Accounts Payable
March 31.
Gabel Company $3,000
Spell Company $21,220
Total Accounts Receivable $24,220

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